Apple ordered to pay $368.2M for patent infringement in FaceTime

A patent licensing firm named VirnetX today won a $368.2 million judgment against Apple, whose FaceTime technology was found to infringe patents covering virtual private network technology.

The federal jury’s ruling stems from a lawsuit filed in US District Court in Eastern Texas, a court that is notoriously friendly to patent holders. VirnetX asserted four patents covering "the use of a domain-name service to set up virtual private networks," saying they were infringed by "Apple’s iPhone, iPod Touch, and iPad as well as Mac computers that use the FaceTime function," according to Bloomberg’s account of the decision.

VirnetX, which makes most of its money licensing patents, said Apple "refused to pay fair value" for the patents. With a favorable verdict in tow, VirnetX lawyer Doug Cawley said the company will seek a court order preventing Apple from continuing to use the patented technology, according to Bloomberg.

We’ve asked Apple for comment. Presumably, the company will appeal. At trial, Apple argued that VirnetX’s patents are invalid and that FaceTime uses different technology than what is covered in the patents.

VirnetX initially sought $708 million in damages from Apple. The company previously won a $200 million settlement from Microsoft in 2010, and has similar lawsuits pending against Cisco, Avaya, and Siemens. Those cases are scheduled to reach trial in March.

VirnetX was formed by former employees of Science Applications International Corporation (SAIC), with its patents stemming "from work performed by SAIC… for the U.S. Central Intelligence Agency to develop secure communications," Bloomberg reported.

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At trial, Apple argued that VirnetX’s patents are invalid and that FaceTime uses different technology than what is covered in the patents.

Wouldn't you just use a secure TCP or HTTPS stream to send and receive video since that would be easiest? There's no need for the weird technology in the patents. Which also brings up another question: how did they determine that their patents were being infringed? Of course I know they used packet inspection, but how did they analyze the data that supported their hypothesis.

From what Bloomberg says, it sounds like VirnetX is using the term "virtual private network" extremely loosely, like being able to state that AJAX over SSL is a VPN because it is a secure way for two people to talk to one another. I'm old school, I define VPN as a way to access the resources of an internal and private network (like a corporate LAN) over an external network (like your home Internet, or a hotel's WiFi).

I understand that Apple would not look at patents for this. There was no need for VirnetX's described technology as there was an acceptable solution already in place (TCP secured with SSL or HTTPS).

16 posts | registered Aug 22, 2012

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So many patent-lawsuit headlines on Ars, now! Pretty soon there will need to be a dedicated category on the site that covers IP litigation. It can be called 'Under the Bridge" (for the patent trolls that live there!).

if this district is as troll friendly as it seems, this isn't newsworthy until the case is moved out of the sticks of Texas. If it gets upheld on an appeal or if apple actually decides to pay out, then it's news.

otherwise, it's like reporting election results with 3 of 6,000 precincts reporting...not really news but THANK YOU FOR PLAYING

Apple are no worse than many other companies (look up Samsung sometime) but at least everything they fight for is used in an actual, shipping product. They don't troll, they definitely use the patents.

Patents may be toxic when poorly defined and broadly applied in litigation, but the people supporting their use against Apple are also implicitly supporting Apple's use of patents against others.

Apple are no worse than many other companies (look up Samsung sometime) but at least everything they fight for is used in an actual, shipping product. They don't troll, they definitely use the patents.

Patents may be toxic when poorly defined and broadly applied in litigation, but the people supporting their use against Apple are also implicitly supporting Apple's use of patents against others.

Apple are no worse than many other companies (look up Samsung sometime) but at least everything they fight for is used in an actual, shipping product. They don't troll, they definitely use the patents.

Patents may be toxic when poorly defined and broadly applied in litigation, but the people supporting their use against Apple are also implicitly supporting Apple's use of patents against others.

I'm not defending anything. I'm saying that while the system is flawed, Apple have only ever sued based on patents they're actively using. They're not some NPE looking for cash without ever producing anything.

Anyone claiming that Apple are somehow getting a taste of their own medicine, as you did earlier, is supporting the system as it exists today. The right stance for you to take would be to consistently decry software patents.

I'm not defending anything. I'm saying that while the system is flawed, Apple have only ever sued based on patents they're actively using. They're not some NPE looking for cash without ever producing anything.

Great. But using a patent is only one of multiple necessary conditions for defending it to be reasonable. Another condition is that the patent is reasonable.

Quote:

Anyone claiming that Apple are somehow getting a taste of their own medicine, as you did earlier, is supporting the system as it exists today. The right stance for you to take would be to consistently decry software patents.

I said I didn't like seeing the troll win. I'd like all this bullshit to end for all sides. But given the current shitty system, it's fair that Apple pays in addition to receiving. And if Apple bleeds enough, maybe Apple will lobby for change (although that isn't likely).

At trial, Apple argued that VirnetX’s patents are invalid and that FaceTime uses different technology than what is covered in the patents.

Wouldn't you just use a secure TCP or HTTPS stream to send and receive video since that would be easiest? There's no need for the weird technology in the patents. Which also brings up another question: how did they determine that their patents were being infringed? Of course I know they used packet inspection, but how did they analyze the data that supported their hypothesis.

From what Bloomberg says, it sounds like VirnetX is using the term "virtual private network" extremely loosely, like being able to state that AJAX over SSL is a VPN because it is a secure way for two people to talk to one another. I'm old school, I define VPN as a way to access the resources of an internal and private network (like a corporate LAN) over an external network (like your home Internet, or a hotel's WiFi).

I understand that Apple would not look at patents for this. There was no need for VirnetX's described technology as there was an acceptable solution already in place (TCP secured with SSL or HTTPS).

"Apple tasting its own medicine" would be product injunctions and billions in losses (cf. HTC, whose flagship One X phone missed its launch date in the US due to suspected infringement of Apple's patents), not the pocket change that they will pay to a patent holder.

I wonder if this story has any relevance to Apple's never fulfilled promise to make FT an open standard. I guess it would be problematic to do so if it is partly based on unlicensed technology.

For so long hearing "patents are like nukes, most companies just have them as a form of defensive dissuasion to show they can retaliate if they are attacked" ... well at the end looks like nuclear war have started.

Wouldn't you just use a secure TCP or HTTPS stream to send and receive video since that would be easiest? There's no need for the weird technology in the patents.

TCP is shockingly bad for streaming, and you cannot use HTTPS without using TCP.

The problem is a single dropped TCP packet would pause FaceTime's video and audio for a quarter of a second or longer.

With UDP dropped packets create tiny glitches in the video or audio that nobody will ever notice anyway.

FaceTime would be using UDP, and therefore yes - it is necessary to have complicated technology because there are a lot of features in TCP that FaceTime really needs, and they are not easy to add on top of UDP.

For so long hearing "patents are like nukes, most companies just have them as a form of defensive dissuasion to show they can retaliate if they are attacked" ... well at the end looks like nuclear war have started.

That analogy is crap. If somebody fires a nuke at me, I can fire a nuke back in their direction.

If a "patent licensing firm" goes after me for patent infringement there is nothing I can do in response - assuming the patents are valid.

Another software patent case, just great. It really doesn't matter who's involved it always makes for grim reading. How does any of this help competition or innovation? Damages seem to be disturbingly high, even for a company with deep pockets like Apple.

I think the EFF have the right idea when it comes to patents; if you don't make something you can't hold other companies to ransom.

Here's hoping lawsuits like this eventually sway corporate opinion in favour of reform.

I'm old school, I define VPN as a way to access the resources of an internal and private network (like a corporate LAN) over an external network (like your home Internet, or a hotel's WiFi).

The problem is you can't apply old-school thinking to these things.

A VPN is, by definition, a method of connecting two distinct networks together. In theory, when two iPhone's connect together, without the appropriate firewalls and hard limitations, data could theoretically move across that connection from devices on the same network(s) as the two connected devices.

Ergo, you can probably argue that any secure connection between two devices, regardless of the means or intention, forms a virtual private network.

I'm not defending anything. I'm saying that while the system is flawed, Apple have only ever sued based on patents they're actively using. They're not some NPE looking for cash without ever producing anything.

Not true. While they produce a lot, they have a lot of patents that they are not implementing themselves that are in play in Apple vs HTC and Apple vs Motorola.